De Beers’ $370M Sight Reflects Slow Rough Market

De Beers’ October sight closed with a value of $370 million as rough-diamond buying slowed due to holidays and sightholders reported a sluggish dealer market.

Proceeds from the miner’s eighth sales cycle fell 27% from $507 million in the previous sight in August, and dropped 25% compared with the equivalent period a year ago, according to Rapaport records. Rough prices were largely unchanged from the previous sight, sightholders noted, with many dealers on the secondary market struggling to make a profit on the goods or even cover costs.

De Beers offered fewer rough diamonds for sale during the month as last week’s sight occurred during a period when polishing factories in India and Israel were closed for religious holidays, the company’s CEO Bruce Cleaver explained Tuesday.

“Sales were in line with expectations, at what is a seasonally slower time for rough-diamond demand,” Cleaver added.

The Indian cutting industry is preparing to close for Diwali, which occurs this Thursday. Buyers brought rough purchases forward to the July sales cycle because of the relatively early date of the festival this year, De Beers noted at previous sights. The last two sights have both been significantly smaller than a year ago as a result.

Sightholders were optimistic about the end-of-year holiday season, even as De Beers’ rough sales have declined 7% to $4.38 billion for the year to date, Rapaport records show. Russian miner Alrosa echoed this positive outlook, also noting that the timing of Diwali had weakened sales in September.

“We expect the traditional revival of the market situation in the fourth quarter, as the industry starts to prepare for the winter holiday season,” Alrosa vice president Yury Okoyomov said last week.